Thursday, April 13, 2006

Growth: The great superstition?

Growth — in the economic sense — seems to be the ultimate value of our age. To see how economists, politicians, and journalists fling the word around, you'd think it had a religious significance ... if, that is, religion were still in style in most of the Western world.

I don't get it. I've never gotten it. What does "growth" mean? More of everything? Bigger numbers? Why is that something to worship?

Maybe everyone else understands something about growth that I don't. Anyway, occasionally (not often) I happen to run across someone else expressing Doubts.

Bill Bonner publishes a daily on-line newsletter called The Daily Reckoning, with his and various columnists' views about the follies of the financial markets. Although it's a come-on for various investing schemes — not exactly in the mainstream and best approached with caution — it's generally well written, sassy, and entertaining. Recently Bonner included an extended quote from James Kunstler, author of a book called The Long Emergency, which I hereby pass on:

Americans ought to regard the word 'growth' with trepidation.

When invoked by presidents and economists, it is meant to imply ideas like 'more' or 'better.' It's a habit of thinking left over from the exuberant phase of the industrial age, when there was always more of everything to get. Nowadays, though, as we enter the terminal years of cheap energy, the word 'growth' invokes a new set of ideas.

For instance, 'impossible.' With the price of oil edging toward $70-a-barrel now, and likely to flirt with $100 by the end of the year, the effect will be higher costs for virtually all products and services, and tremendous stress on every socioeconomic organism from the family to government at all levels to the Ford Motor Car Corporation. The only 'growth' we might expect under these conditions is the growth in our exertions to stay where we are, and the truth is that many of the weak will simply fall behind.

Another idea that 'growth' might invoke would be a fear of an unstoppable rising population competing for scarcer resources: incomes, energy, food, shelter. Surely this is one of the specters behind the illegal immigration issue, a dawning recognition that the American cornucopia is becoming an emptier basket, with fewer fruits, less energy, and not many gold nuggets left in it.

The cheap energy era led us into a climax of surpluses, and these surpluses represented the general 'more-ness' and 'better-ness' of late industrial society. In a post cheap energy world, accumulated surpluses will be meager to nonexistent. There is bound to be a scramble for whatever is left. Geopolitically, this means a contest for the world's remaining oil, which tends to be concentrated in just a few places. In each nation, there is likely to be a parallel scramble for whatever fruits, gold nuggets, and therms are still to be had, throwing off a lot of red-hot political sparks that will burn people. A lot of the remaining energy worldwide will be devoted to these scrambles, and thus essentially wasted.

Most economists would disagree in whole or part. Their refrain is that there have always been doomsayers claiming we are running out of resources, but we find new deposits, get more efficient in extracting them, and so on. And so far, they've been right. But I still can't help wondering: granted that we can't know exactly the quantities of resources that are still available, and no doubt we can continue to find better ways to drag and squeeze them from our big round rock, are they infinite?

For the first time I can recall, questions about "peak oil" and shortages of minerals such as copper and silver are starting to be taken seriously by respectable (if that's a recommendation) technologists and theorists. This time there's a new factor: not just possibly shrinking supply, but monster increase in demand, especially from two awakening giants: China and India.

Kunstler continues:

There are many ways of viewing this 'growth' predicament, and some strategies we can turn to in the face of it. An obvious one is to change our behavior, to stop acting as though our destructive, terminal, and futile activities were beneficial or indispensable. For instance, we could yield to the reality that the age of mass motoring will have to end.

Instead of desperately seeking 'alternative fuels' to run our 100 million cars, we could make an effort to restore our railroads. Instead of a million McHousing starts out in the meadows and cornfields, we could repair our existing towns and cities. There is no reason why they cannot be rewarding, beautiful places. There may well be greater benefit in walking more and driving less. The well-off Americans who have visited Europe over the past several decades invariably notice this.

Anyway, we are going to need every meadow, cornfield, and pasture that we have, because as cheap energy wanes, we are going to be desperate to grow enough food to feed ourselves — another reason to be wary of alt.fuel fantasies based on growing crops dedicated to gasoline substitutes.

There is some good sense here, but I think the emphasis is misplaced. None of his suggestions are going to be more than a temporary answer, even if feasible at all, unless we accept that growth is the problem. In particular, population growth, whether it's caused by Jewish families on Long Island, Mormons on the edge of the Great Basin, or Mexicans in California. More is more. And I, for one, am not willing to sacrifice driving my car or moving into a central city because Mr. Kunstler tells me that's how "well-off" Americans perceive Europe.

And I take this stand not because I wouldn't make sacrifices for the common good, but because I don't think these sacrifices would be of any real use. We've got to stop exalting growth and accommodating it (as though we can). Everything else is just tinkering.

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